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Dow appreciates Fed move
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November 17, 1998: 2:49 p.m. ET
Rate cut, though expected, propels stocks into positive territory
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NEW YORK (CNNfn) - The bulls stepped in on Wall Street in late trading Tuesday, within seconds after investors learned of a Federal Reserve decision to lower two short-term interest rates by a quarter-point in an effort to keep economic recession at bay.
At around 2:30 p.m. ET, the Dow Jones industrial average was 16.73 points higher at 9,027.98, erasing a more-than-60-point loss minutes before the Fed's decision was announced. On the New York Stock Exchange, declining stocks outnumbered advances 1,617 to 1,306 as trading volume reached 462 million shares.
The Nasdaq Composite rose 3.94 to 1,865.62 and the S&P 500 index gained 3.59 to 1,139.45. (Click here for a look at today's CNNfn market movers)
The Federal Open Market Committee, the Fed's monetary policy arm, finished a one-day meeting by announcing a 25 basis point cut in both the Fed funds rate and the discount rate, the two key short-term interest rates the central bank controls.
The bond market kept its gains as investors who had bet on an imminent interest rate cut found themselves right. The benchmark 30-year Treasury bond rose 9/32 of a point in price, for a yield of 5.27 percent.
The dollar moved higher against the Japanese yen and the German mark, despite the rate cut announcement.
Hunger for financial stocks
In stocks, financial and technology issues once again dominated trading, with banking and brokerage shares soaring as soon as the rate cut news became public.
Among the Dow components, American Express (AXP) rose 1-15/16 to 98-7/8, Citigroup (CCI) gained 1-3/4 to 45-7/8, and J.P. Morgan (JPM) climbed 2-5/8 to 106-1/8.
Outside the Dow, BankAmerica (BAC) advanced 1-7/8 to 61-5/8 and Chase Manhattan (CMB) rose 2-13/16 to 60-11/16. In the brokerage sector, Lehman Brothers (LEH) gained 1-3/16 to 41-3/8 and Donaldson, Lufkin & Jenrette (DLJ) was up 2 to 37-7/16.
Among the big-name tech stocks, Dow component Hewlett-Packard (HWP) tumbled 5-7/8, or nearly 9 percent, to 60-1/4 as investors appeared disappointed with the company's growth prospects even after HP reported better-than-expected earnings late Monday.
IBM (IBM), another Dow 30 technology leader, gained 1-1/2 to 160-7/8. On the Nasdaq, Dell (DELL) rose 1-9/16 to 64-3/4, Intel (INTC) edged up 1/16 to 106-15/16, and Microsoft (MSFT) gained 1-11/16 to 110-1/2.
In the day's newsmakers, shares of newly merged transatlantic auto giant DaimlerChrysler (DCX) made their Big Board debut, easing 7/16 from Monday's when-issued price to 83-7/8.
And the stock of Envoy (ENVY), an electronic data-processing service provider, surged 6-1/16, or more than 18 percent, to 38-1/2 on news the company had resolved an accounting problem raised by the Securities and Exchange Commission. 
-- by staff writer Malina Poshtova Zang
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